Libya: Running Out Of Time, Money And Excuses

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October 11, 2018: Tribal and militia violence is again reducing oil production. Oil exports from the Zawiya export facility are down about 50,000 BPD (barrels per day) recently because of militia violence around the Sharara oil fields, which supplies Zawiya. There was even worse violence, and production reductions, in July. Back then the attackers were local militias threatening to seize control of facilities so they could demand high paying and permanent status as PDG (Petroleum Defense Guards). This scam is usually (but not always) attempted by local tribes or militias that see nearby oil facilities (pumping, pipelines, export terminals) as an economic opportunity that is potentially worth a lot of money if you are willing to fight for it. The problem is there are often competing groups willing to fight for the right to be the highly paid (and not very reliable) PDG. The only solution to this problem is a national government that can provide law and order. The most recent violence disrupted access to the Sharara facility, which is largest oil field in Libya and before the revolution in 2011 accounted for 17 percent of national production. Currently, it can, when undisturbed, still produce the same amount, up to 300,000 BPD, as it did in 2011. The Sharara field was developed and managed by a multinational (Spain, France, Austria and Norway) effort and that means there are a lot of foreign workers there, mainly to deal with the high tech stuff.

For several years the main source of oil production interruption has been extortionate oil facility guards or other local militia problems. Despite these constant interruption the NOC has continued to increase production in exports. By the end of 2017 production was about a million BPD. The current goal is to reach 1.5 million BPD by the end of 2018 and 2.1 million BPD by the early 2020s. This is far in excess of pre-2011 levels (1.6 million BPD) but is necessary because of the need to finance reconstruction. TA major problem with increasing production is that it attracts more greedy militias seeking to get paid.

Russia Comes Through

In the east several dozen Russian special operations and intel officers are stationed at bases in Tobruk and Benghazi. There are a lot more armed Russians at these two bases but most of them are contractors from the Russian Wagner Group. The contractors concentrate on providing training for LNA men. Russia is also believed to have brought some modern weapons with them, like air defense systems and cruise missiles. The LNA and its commander Khalifa Hiftar have a long relationship with Russia. Hiftar has visited Russia several times seeking more than diplomatic support from Russia. Now Russia is delivering and in return, Hiftar has helped Russia get oilfield exploration, development and management contracts. Russia has also become a major supplier of wheat to Libya, but that probably would have happened anyway because since the Soviet Union collapsed in 1991 Russia has resumed its pre-communist status as a major grain exporter. Russian wheat is also cheaper given lower production costs and the poor exchange rate for the Russian currency.

The Elections Fade From Possibility

The May agreement on national presidential and parliamentary elections being held in December becomes less likely the closer December gets. The main problem remains militias in and around Tripoli refusing to cooperate. These militias are acting on their own to make sure they do not lose power or income because of a unified government. This is largely a problem with militias loyal to the UN backed GNA (Government of National Accord) in Tripoli. This is one of the reasons the GNA is the weaker of the two existing national governments, despite occupying Tripoli (the national capital and largest city in the country). While the GNA is based in Tripoli and recognized by the UN it has proved much less capable than its eastern (Tobruk) rival the HoR (House of Representatives). The most obvious sign of GNA decline is its inability to keep the Tripoli airport open. Since August 31st the airport has been closed most of the time because of rouge militias either attacking the airport with rockets or occupying it. The government finally regained control of the airport by the end of September. There are doubts, especially by the UN, that the GNA can maintain control of the airport or Tripoli itself. Without the airport, operational international flights have to land at Misrata (210 kilometers to the east) the third largest city in the country and drive to the capital. The GNA has been trying to reduce violence by appointing more powerful and cooperative militia leaders to senior government posts. That is not lucrative for many militia leaders who are finding it more profitable to get into the oil smuggling business. A growing number of oil tanker trucks can be seen headed for Tunisia. Even that is not enough to keep all the militias solvent and that is driving militia leaders to more desperate measures in order to keep their private armies operational.

It was agreements between the GNA and HoR governments that made the December election plan possible but since May the GNA has declined to the point where it can no longer operate. The two governments agreed to increase their cooperation (already functional enough) to improve the operation of the NOC (National Oil Company) and the CBL (Central Bank of Libya). These two institutions are about the only two that are fully functional and are now looking to the HoR for protection. Actually, the source of protection is the LNA (Libyan National Army) that recognizes the HoR as its political boss. The H0R is not much more effective than the GNA with many of its elected members more interested in themselves than the fate of Libya. Yet some form of security (law and order or a reasonable substitute) is essential because of the relentless efforts by various factions to corrupt the bank or the oil company. Keeping the NOC and SBL going is essential to national survival because without the oil income living standards will plunge to levels that will force much, if not most of the current Libyan population to emigrate or starve.

The bank and oil company may limp along to stave off mass starvation but the GNA and HoR are not getting together to hold the national elections, at least not in 2018. The two governments were supposed to have agreed on election terms and procedures by mid-September and that did not happen for either government. Now a lot more is not happening as well.

The collapse of the GNA and growing strength of the somewhat more unified HoR and its military component the LNA has meant that there is growing pressure on the LNA to move west and take control of Tripoli and the Tunisian border area. The UN opposes that solution as does, for the moment, LNA commander Hiftar. As a veteran officer, Hiftar knows he has not got sufficient troops to go after Tripoli. A less experienced commander might try it anyway but that would risk higher casualties for the LNA and Hiftar has kept the LNA together and growing by taking care of the troops and not being reckless. At the moment most LNA troops are busy keeping the peace in areas they have recently pacified (like the coastal city of Derna and various bits of the south where most of the oil is.

Meanwhile, the UN and many other Western critics are beginning to accept that Hiftar does not want to become another Kaddafi (a manipulative strongman and tyrant) and rule the country for decades. Hiftar is 75 years old and not in the best of health. Not exactly in a position to found a lasting dictatorship. Hiftar wants the GNA and HoR to cooperate and give Libya the stable government it has not had for a long time. Most Libyans still see another Kaddafi, or someone like him, as a problem, not a potential solution.

October 10, 2018: In the north, 46 kilometers from the coast near Derna, Libyan coast guard gunboats fired on two Sicilian fishing boats, forcing the fishing boats to halt, be boarded and forced to go to the coastal town of Ras Al Hilal. The 13 Italians aboard the two boats. The two Italian boats were in international waters (more than 22 kilometers from the coast) and the “coast guard” gunboats belonged to one of the two rival “coast guards” that are both basically seagoing militias out of make money anyway they can. For most of 2018, the Libyan coast guards and several land-based gangs have been paid by European nations to help shut down the movement of illegal migrants from Libya to Europe. That has worked. Italy has seen illegal migrants decline nearly 90 percent versus 2017. NGOs have withdrawn their rescue ships (that picked up illegals in people smuggler craft that were not able to complete the trip) from the Libyan coast and made it more expensive for the people smuggling gangs (that now had to procure boats that could actually make the trip). The smuggling gangs were further frustrated by Libyan coast guard gunboats forcing the people smuggler boats back to Libya (and less the smugglers could pay a convincing bribe). It’s been a bad year for the people smuggling gangs, which are a combination of Italian and Libyan gangsters who used to (until 2018) make huge profits by getting illegal migrants to Europe. With so many of the smuggling attempts failing fewer people see the cost involved paying people smugglers to get them to the Libyan coast worthwhile. If the Libyan smugglers could not get people across the Mediterranean there was little incentive for African or Middle Eastern illegal migrants to pay the fees that would bet them to the Libyan coast. Another complicating factor is that in the last two years more Libyan militias set themselves up in the people smuggling business and that led to price cutting because there were fewer illegals coming to Libya and gangs competed by lowering prices. Then there was the boat shortage. Most boats used by people smugglers made a one-way voyage. European nations did not return the empty smuggler boats to Libya (and usually destroyed them). An effort to import cheap Chinese inflatable boats failed when their presence was detected and the suppliers of these inflatables found and shut down.

October 8, 2018: In the north (Derna) LNA forces captured the local ISIL leader, Hesham Ashmwai. This was considered a major event because Ashmwai, a former Egyptian special operations officer, had been a notably effective Islamic terrorist leader in Libya and long sought. Ashmwai continued to organize attacks in Egypt after he moved to Libya in 2014 (to recover from wounds). Ashmwai was the most wanted Islamic terrorist in Egypt and will eventually be turned over to Egypt by the LNA, which has been supported by Egypt for years.

October 2, 2018: The international airport in Tripoli is open again. The airport was closed briefly yesterday when some rockets fell nearby. The airport has been closed frequently in the last month because of fighting in the city.

September 26, 2018: In Tripoli, another ceasefire agreement was signed. Since late August the militia fighting has left about 120 dead, over 400 wounded and more than 25,000 people driven from their homes. A September 4th ceasefire lasted about two weeks and this one is supposed to last longer.

 

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